How Corporate Insiders are Paid

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The public gets upset when learning just how high corporate salaries and bonuses are. These high amounts don’t constitute a state of being overpaid. What the public doesn’t get is that these amounts pale in comparison to what corporate insiders steal from the country.

The way to get paid the most in the shortest period of time is to convince government to artificially increase stock prices. The Federal Reserve is under what amounts to a political directive to force stock prices up. Lower interest rates and a huge money supply increase are only part of the picture. There are phone calls. There is intimidation. There is every kind of off the record communication a person could imagine. The Fed needs higher stock prices. Phone calls go out to corporations. It goes something like this. “Joe, this is Bob from the Federal Reserve. We are doing a little survey here to get a handle on corporate plans for the next year. The wealth effect seems to be having an influence. Are you guys planning any buybacks this year? We think it is good for the economy. We keep interest rates low to make these things possible. Some of the central banks are buying stocks outright……….” The corporate insider reads this as the Fed pressuring them to do. buybacks. The Fed has their backs. They are taking no risk.

How does this work out for the corporate insiders. They buy shares back and their stock rockets to astronomical levels. Of course they all own one hell of a lot of stock. The money they make this way is far greater than the enormous salaries and bonuses they get in addition.  This is why the stock market is going up. The public will pay for this. They don’t even know what is going on.

The long term on this it the destruction of the entire economy. Why? Put the rich on welfare and they become lazy just like the poor. The rich being lazy is catastrophic. The poor being lazy is only unfortunate.

About Fantasy Free Economics

James Quillian is an independent scholar and economist.
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